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MILKING THE GREY POUND

Follow the money, they say. So why isn’t the advertising industry chasing the older, slow-moving targets that hold all the cash? Richard Butterworth asks why the Mad Men are missing a trick.

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MILKING THE GREY POUND

The grey pound, the City’s measure of senior Briton’s spending power, has grisly and, for some of us, ominously immediate overtones. It stirs the toxic souffle that’s waiting on us all: stairlifts, lavender soap, funeral cover, walk-in bathtubs, jigsaw puzzles and partworks, pressure relief pads and catheters, Werther’s Originals, dialysis centres, Richard Clayderman albums, beige, extra-length shoe horns, Eastbourne; all threatening to fold us into a giant end-of-life egg custard before we’ve prised off our Nike Air Jordans.

But we’re all getting younger, 60 is the new black and it’s time to question whether the Mad Men are getting the marketing mix right. Perhaps they should start speaking more respectfully to their elders because for one expert the mature market is “a group of people which is too large to ignore, too diverse to stereotype and too complex to second-guess”.

In the UK, the grey pound is worth almost £40 billion and rising, probably by another £17 billion before 2025. Economists and politicos bend at the knee before the grey pound as our potential saviour from recession. George Osborne provokes baby boomers (for some, a discredited term) into spending their grey pounds like drunken sailors; pension pots plundered for yachting club fees and tall ship trips around the Hebrides. With smartphone-armed youth increasingly busy in the electronic elsewhere, the grey pound is ushering back to the cinema the ‘skiers’ (as in ‘spending the kids’ inheritance’) by the coachload.

According to Mark Beasley, MD of specialist mature-marketing consultancy rhc Advantage, the number of people aged over 65 now exceeds those under 16. “[They] will increase in size by 50% in the next 20 years and will continue to grow, absolutely and relatively.” In the UK, Beasley asserts, the over-50s now account for 35% of the total population, 47% of household expenditure and 80% of wealth.

JUMPING JACK CASH

With Barclays estimating a per-person-over-65 average 2014 spend on hospitality and leisure services of £3,372 while other age groups rub along on a niggardly £2,486, there’s no arguing with the cold, bean-counting logic that underpins the grey pound. But numbers aside, the term is freighted with more baggage than a Gatwick carousel after the Saga flight in from Famagusta.

To a generation that’s been defying the years and claiming immortality since the opening chimes of ‘Heartbreak Hotel’, it’s hard to imagine advertisers presenting a clearer and more present danger. Jog on, you Mad Men… hope I die before Pete Townshend gets old.

But wasn’t rock’n’roll meant to arrest the ageing process? Getting old was something our mums and dads did. We had Elvis, and the Beatles, and Dylan, and attitude. We were young and in love and in trouble and proud of it. Decades before royal steel brushed ageing superstar’s epaulette, the peasants were up in Her Maj’s face, Jumpin’ Jack Jagger inspiring street fighting men in Grosvenor Square while Mick Farren galvanised deviant proles in Hyde Park. The Who smashed Rickenbackers, the Move trashed stages, the MC5 scorched Detroit earth. In the pages of Oz and IT a radical Australian feminist bent over backwards, tits out for the cause.

If you believed Jean-Jacques Lebel’s rebel pre-grads occupying the Sorbonne in ’68, the West’s social Laura Ashley was about to be ripped from its Harrods curtain rail, a knackered old order giving way to a virile and thrilling new chaos. We weren’t bothered about getting old because we knew we wouldn’t.

ACT YOUR AGE

The comedown was never going to be pretty. Sunny sixties lysergic optimism darkened under a cloud of Manson and Altamont and we all wretched and reached for the orange juice. Elvis, we learned, liked Nixon. Johnny Ramone prayed to his god to bless George W Bush. Ted Nugent turned hard-right into an armoured Second Amendment redoubt, a single pass of his breach-loaded Gibson Byrdland blasting all that unmanly unAmerican liberal bullshit into the vanishing wake of Vashti Bunyan’s caravan.

Today Bryan Ferry’s son is a huntmaster, Rick Wakeman’s a Freemason, an Edge less edgy builds mansions in Malibu and Germaine Greer says nice things about the Chinese government. Even the orange juice is now too acidic for our increasingly wayward plumbing. Rock’n’roll has gotten old, dig, and we really were born to follow, even if with varying degrees of grumpiness we’re in denial about buying into the grey pound.

But for all that, we nu-oldies aren’t the only refuseniks. We didn’t care about being demonised by the previous generation back in ’65, and we’re sure as hell in no better mood to be patronised by whippersnapper admen 50 years later. Yet despite the grey pound’s power and omniscience, when it comes properly to exploiting it and treating its spenders with due deference, and making a few bob in the process, many modern marketing businesses haven’t a clue.

SUNDAY GROWTH DRIVERS

According to a report from Barclays Corporate Banking in April 2015, £37 billion was pumped into the UK economy last year by empty-nesting over-65s enjoying autumnal travelling and city-breaking. Yet because of the failure by the British hospitality and leisure sectors to target older consumers, that figure should already have been at least £16 billion more.

Barclays also posits that as many as 37% of leisure firms are still trying to seduce 34 to 44-year-olds; a hiding to nothing, given the pollsters’ revelations that this group is among the UK’s most strapped for cash. And 76% of the same businesses even admitted they had no plans for new services and products specifically targeting the baby boomers. With just 5% of the leisure sector identifying over-65s as the group most likely to generate sales and revenue, this suggests a serial disconnect between received marketing sagacity and the much wiser realities.

Following extensive study of the shifts in spending patterns between young and old, Neil Saunders of the market researcher Verdict says: “Historically, it was the younger consumer who drove retail growth. That won’t be the case going forward.”

For Mike Saul, who heads Barclays’ hospitality and leisure division, the mature market represents a huge but hitherto untapped opportunity. “There appears to be a gulf between the perception and reality of the spending power of over-65s,” Saul notes. “By not fully focusing on the needs of this generation, and the revenue growth opportunity they represent, businesses may risk missing out… more needs to be done to start planning and accommodating for the currently overlooked generation.”

TAKEN FOR GRANTED

Mark Beasley, for whom problems faced by his ageing parents channelled the impetus to co-found and chair the Mature Marketing Association (a campaigning assemblage of marketing agencies, academics and consultants), laments the disdain with which a business environment largely the preserve of the young appears to view older consumers.

“[They’re] avoided, ignored, misunderstood, stereotyped, patronised or taken for granted by businesses, by marketing and by marketing communications,” Beasley says. “Death, age and ageing are culturally taboo. Most people working in marketing are under 40 and are socialised to associate age with almost entirely negative attributes. Youth, meanwhile, is associated with creativity… marketing as a business function and discipline developed at a time when young families and youth were dominant.”

Beasley argues that because age is relative, marketing should be consumer-driven and not subject to the often misplaced assumptions of younger agency staff, no matter how professional and well-intentioned they might be. “Our own age dictates not just when we think ‘youth’ ends and ‘old age’ begins, but also our perceptions of the attributes associated with old age.”

Although businesses have persistently failed to address the mature market’s size, segmentation and resistance to convenient demographic pigeonholing (the “too large, too diverse, too complex” trope), Beasley also believes no single text exists to act as a starting point for marketing strategy development. And he counsels against falling back on ‘one-size-fits-all’ certainties when expounding product benefits to a section of the community that deserves better.

“‘Generational marketing definitions [should be treated] with caution. In the UK, terms such as ‘baby boomers’ and ‘Generation X’ provide no useful consumer insight and members of such groups share little other than the period in which they were born. Marketers need to think across age groups, not just within them.” Such inter-generational marketing is often crucial, Beasley adds. “There is almost always more than one age group involved in any purchasing and consumption process. An obvious example is the involvement of adult children in the purchase of retirement housing and care homes.”

MATURE AND CHEESY

For Tracy Norman, another marketer convinced that many of her kin are out of kilter with the over-60s, the breadth of research into the power of the grey pound reveals that businesses can pay dearly for failing coherently to talk to this sector. “They have historically lost, and will continue to lose, sales and growth,” says Norman. “Yet few businesses can today afford to miss such opportunities. Often we have young professionals taking strategies to the mature market based on the myth that older people are set in their ways. But this is a large sector which needs to be segmented and not treated as just one lump.”

What of the programme makers? The BBC is imperiled, the government’s free-market zealots fine-tuning their night-vision sights, crosshairs locked onto the licence fee and any content that might trigger Rupert Murdoch’s sanity detector. So TV programming is increasingly reliant on the marketer’s craft and the life’s blood of advertising. Derek Guthrie, an independent television producer and head of ArtFilms, agrees that broadcasters, like marketers, fundamentally misread what should constitute mature-market programming.

“A marketer will assume that the over-60s want programmes pitched to them in much the same way that a press title is often focused on a specifically-targeted age demographic,” Guthrie says. “This doesn’t necessarily apply in television, which is, by most definitions, a young person’s medium, both to work in and to observe. Older people prefer to be included as part of the whole audience, they enjoy the same programming they always did, and they certainly don’t necessarily enjoy watching a show that’s supposedly targeted at them and no-one else.”

DECLINE AND FALL

Guthrie adds that such misconceptions are unlikely to inhibit the decline of television broadcasting as we know it. “Some programmers assume that older people want to watch their own age-group peers reading the news and presenting programmes of interest. But besides the presentational eye-candy (invariably younger than themselves) this audience demands quality and talent.”

Lumpen and parochial programming that targets only ‘oldies’ is more than no-consequence condescension; it actually erodes its audience. “As the spend on TV advertising shrinks in favour of social media and search engines, not only will production values suffer, but the programmes themselves will start to disappear. All the mature market seeks is quality programming which is entertaining, stimulating and non-patronising.”

Restating the truism that the most successful agencies are those that take the time to research and understand the older demographic, Tracy Norman of TN Marketing adds: “Such firms are recognising that a high percentage of over-60s use the internet to research and buy online as well as in store and on the back of TV advertising.”

CRUISING AND SURFING

Ah yes, the internet. Rob Barber of TYGA Marketing agrees that ad revenues have suffered because of marketers’ unwillingness or inability to recognise their most appropriate audiences. Yet he, too, sees new-media technology forcing the pace of change.

“Advertising can now be served to consumers via a combination of market research, social data mining and technologies that allow communication directly with specific audiences,” Barber says. “This enables a cruise line, for example, to push a seaborne ‘party’ lifestyle to its silver market rather than falling back on the ‘dozing in a deckchair’ cliche that might have once been a shoo-in for this type of advertising.” So what’s relevant and marketable to ever more refined and discrete quanta within the sector can now be discerned? “Yes. But marketers and programmers need to move with the times and embrace the technology.”

The professionals’ opinions converge inexorably on a single conclusion: no marketing strategy or broadcast channel can, or should, routinely be populated with condescending, off-the-peg ‘oldies’ content, as if a section of the media landscape has been fenced off and paved over for one big, virtual, multistorey care home. The times they are a’changin’ for sure. So take heart; if you’ve breached 50, when Michael Parkinson waves life assurance policies around on daytime telly, he ain’t necessarily looking at you, kid.

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